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NEW DELHI: Shares of Idea Cellular went haywire, cracking 15 per cent, just a few minutes after rallying about 15 per cent in early trade on Monday, after the company announced merger with Vodafone India and Vodafone Mobile Services (VMSL) in a deal that put the former’s implied enterprise value at $10.8 billion against $12.40 billion for Vodafone India.

The stock fell 14.73 per cent to hit a low of Rs 92 on BSE. The stock had risen 14.68 per cent in the early trade to hit a high of Rs 123.75.

In a filing to stock exchanges, the company said following the deal, the promoters will hold a 26 per cent stake in the combined entity, while Vodafone will hold 45.10 per cent after transferring a 4.9 per cent stake to Idea promoters for Rs 3,874 crore in cash on completion of the merger. The remaining stake will remain with the public.

This will bring about the much-needed consolidation in the telecom industry, analysts said.

After the merger, Vodafone India and its subsidiary VMSL –excluding Vodafone’s investment in Indus Towers, its international network assets and IT platforms – will get vested in the company, Idea said. Nitin Soni of Fitch Ratings said the announcement was on the expected lines. “We expect the combine entity will have about 40 per cent revenue share. In the process of integration and combining the two big operations, they might lose some revenue market share to Jio or to other incumbents. We estimate about $11-12 billion revenue and Ebitda margins of 28-30 per cent, once these firms combine their operations.”

Soni believes the combined Ebitda margin could improve by 250 to 300 basis points as the two companies would save some expenses on the network.

Idea said it would issue equity shares to Vodafone India after the scheme of amalgamation with VMSL, which would be equal to 47 per cent of the post-issue paid-up capital of the company on a fully-diluted basis.

After the company’s merger with Vodafone India, shares issued to the latter in pursuant of the merger of VMSL with the company would stand cancelled, the company said.

“Post such cancellation, the company shall issue an aggregate number of equity shares of the company to 50 per cent of the post issue paid-up capital of the company to the shareholders of Vodafone India,” it said.